Self-drive car rental MyChoize plans to invest $25-30M in next 2 years

Taking a walk amidst the bustling car and bike carnival event at CISCO organised by Orix, the latter company’s CEO and MD Sandeep Gambhir talks about how the company slowly and strategically plans to seize the growing market with their fledgling 6-month old consumer product MyChoize, which offers self-drive rental cars.

21 years back Japan-based Orix had forayed into India’s B2B segment with chauffeur-driven car rentals for corporate and since then the company has expanded into 27 cities with 1500 members. At present, its India business is present in sectors including vehicle leasing, car rental, micro-finance, corporate loans among others. Globally the firm claims to have clocked profits of $3 billion while in India its revenues crossed Rs 750 crore.

Foray into self-drive car rental segment

“With 56,000 self-drive rental cars, Orix is the second largest player in Japan. In India where we are the leading car leasing company for corporate, we have commenced with a fleet of 300 self-drive rental cars and are already present in seven cities and will expand to three more cities by end of next month,” says Sandeep.

He further adds that the company plans to invest $25-30 million in its newly launched self-drive car rental business MyChoize and add roughly around 1,100 cars in the next two years. So far, it has been launched in Delhi, Bengaluru, Mumbai, Kolkata, Pune, Jaipur, Chennai, and Hyderabad.

“Leveraging on our B2B network and resources, we have been witnessing a 30-40% growth every month and aim to achieve a 4X growth in the next fiscal year,” says Sandeep.

Furthermore he adds, “Being an established player in the car rental space, increasing our fleet and scaling is not a hurdle. But, it’s not a relay where we have to lead rather a marathon where we believe in building our footprint and acquiring sticky customers is our primary goal.”

Strategic Play

MyChoize plans to outplay its VC funded competitors with competitive pricing and ‘packaging of the service’. Elaborating on this, Sandeep says that the service does not rely on lone supplying but operational tie-ups as well which includes roadside maintenance, ability to serve the customers at crisis and is therefore confident that relying on their current infrastructure, ‘customer experience’ will be a definite plus.

Sandeep further explains, “The demographics across these cities are also very different. Over the last few months, we have observed few city trends. For instance in Delhi, youngsters’ demand for high-end cars are quite high while in Bengaluru the migrated youngsters prefer budgeted vehicles.”

“Another surprising trend that we have noticed is a soaring demand from the foreign tourists who book cars for a consecutive of 7-10 days or even more, while on an average cars are usually booked for 2.5 days.”

Taking a profound leverage on its parent company’s deep pockets the company is now focusing on its marketing initiatives and believes that its pricing will be 10-15% lower than the average market prices and also ensure that there is no surge pricing on weekends or holidays when the demand is at a peak.

Notably, MyChoice will rent out cars without any fuel which will further lower the costs for the customers.

The way forward

MyChoize which is currently closing bookings on its website plans to launch its Android and iOS app by the end of this month.

The company is also in talks with regulatory bodies regarding rental services for bikes. However, in this segment the company plans to offer only high-end bikes. The service will be launched in cities including Delhi, Bengaluru and Hyderabad but no fixed timeframe has been set.

Furthermore following a global trend, the company expects that in the foreseeable future even in the Indian market it should enable a customer to rent out a car and drive from one city to another and leave it, from where another customer can avail it. However, this can happen only when demand from across the cities is equally high.

Going forward, the company will face tough competition from Zoomcar which had forayed into India in 2012. Till date, the startup has raised $46 million and has roughly around 2,200 cars from manufacturers including Ford, Mahindra, Maruti and Tata running across Bengaluru, Mumbai, Delhi, Pune, Chennai, Hyderabad and Chandigarh.

This segment which is still at a nascent stage is yet to witness aggressive competition and is likely to be abuzz in the next 3-4 years. While the app-based cab hailing operators have already carved out its market and are battling intense competition, it is yet to begin in this segment. However, Sandeep believes that with the given scope and size of the Indian market, 4-5 steady players will dominate and carve out its own share once the market is mature.